Singapore's industrial production grew in January at more than double the pace of the previous month as chip makers and pharmaceutical manufacturers increased output to meet orders and factories stayed open for more days.
Manufacturing, which accounts for a quarter of Singapore's economy, increased 14.6 percent from a year earlier after a revised 5.6 percent gain in December, the Economic Development Board said in a report Monday. Economists had expected a rise of 16 percent.
Singapore's government lifted its 2007 growth forecast this month to as much as 6.5 percent, citing improving global economic conditions. Semiconductor manufacturers in the United States and Japan are reporting higher orders, and worldwide sales of chips that power goods from electronic gadgets to household appliances are expected to reach a record $273.8 billion this year.
"We are seeing some recovery in electronics, and we expect the numbers to improve, especially in the second half," said Tomo Kinoshita, an economist at Nomura Securities in Singapore. "As we see more investments coming into Singapore, we expect growth in output to continue."
From a month earlier, industrial production fell a seasonally adjusted 6.5 percent in January, following a revised 4.9 percent drop in December.
There were more working days in Singapore in January this year than in 2006, when the Lunar New Year holidays fell in that month.
Electronics output rose 4.1 percent in January from a year earlier, following a revised drop of 7.9 percent in December. Electronics production rose for the first time in five months. Electronics account for about 29 percent of Singapore's manufacturing and medicines make up over 22 percent.
"Electronics should remain on an uptrend," said David Cohen, an economist at Action Economics in Singapore. "The trajectory is still higher for Singapore and the rest of the region for electronics."
Singapore's electronics exports rose 2.1 percent in January from a year earlier following a 19.3 percent drop in December. Sales of electronics products rose to 6.35 billion Singapore dollars, or $4.15 billion, last month, from 6.2 billion dollars in December.
Singapore's computer chips production rose 12.3 percent in January from a year ago, after a similar revised increase in December, according to the Monday report.
Worldwide sales of semiconductors are expected to rise 10 percent this year, the Semiconductor Industry Association said Feb. 2. Stats Chippac, Southeast Asia's largest chip tester and packager, reported a record fourth-quarter profit, helped by electronics such as Sony's PlayStation 3 game console.
Growth in Singapore's electronics shipments has been curbed by a decline in production of computer disk drives as manufacturers move to lower-cost sites such as China. Production of disk drives fell 13.2 percent in January from a year ago, after a revised 29.9 percent drop in December.
The city-state's factory output tends to fluctuate from month to month because of swings in production by drug makers that shut plants for cleaning before making different chemicals.
Pharmaceuticals output increased 25 percent in January from a year earlier, after rising a revised 18.9 percent in December, according to the report.
Excluding pharmaceuticals and medical devices, production rose 13 percent in January from a year earlier, following a revised increase of 2.7 percent in December.
Output also rose as transport engineering companies in Singapore complete repair and construction of ships and rigs by oil companies that are stepping up exploration and production.
Keppel, the world's biggest maker of oil rigs, said Feb. 15 it had received a $392 million order to build a rig for Skeie Group. The announcement came days after a rival, SembCorp Marine, said it had won a $300 million contract to build an offshore platform for Carigali-Pttepi Operating of Malaysia.
Singapore's transport engineering output increased 45.2 percent in January from a year ago after climbing a revised 29.8 percent in December, as marine and offshore engineering production rose 55.4 percent.
"The swing factor remains pharmaceuticals growth and transport engineering, which is still very strong," said Alvin Liew, an economist at United Overseas Bank in Singapore. "The extra working days also had an additional impact on the better output numbers."
source news : iht.com
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